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So you're claiming Amazon got the right to sell these ebooks from the publisher for $0? Fascinating. I wonder how the publishers and authors planned to make any money like that.

Or maybe the publishers sold the books to Amazon from some non-zero price. That price would of course be a COST to Amazon, and if they sold the books to their customers for less than that amount then they sold them below cost.

The first one costs something, the rest are copies that can be done for nothing.

Yeah, that first one costs tens of thousands of dollars. Booksellers have to maintain an entire digital infrastructure to distribute the product, they have to buy the books from publishers who have to spend considerable money per book for editing, packaging, graphic design and layout, etc. It costs a lot of money to produce and distribute professionally created books.

But under the wholesale model, Amazon buys both books and e-books from the publishers at a bulk rate and sells them to consumers for a price b

What does it even mean to post a copy online and then "take your machines down?" Where are you posting it, Reddit? Even without any DRM you still need a server to be able sell it online. For instance, Apple doesn't have any DRM on music they sell, and I assume Amazon doesn't either. But they still spend quite a bit on software development, servers, network bandwidth and vendor contracts to be ABLE to sell it. It doesn't cost them $1 per song to sell it, but it's not $0.

You can post it to piratebay for all I care. There is no need to collect a fee, this is again a want not a need. If you do want that then the price of the book is up to a couple cents per for every copy after the first one.

The cost of ebooks is not $0. You have to maintain a server farm to store, sell and distribute those ebooks.Those servers have to have power, cooling, networking, and floorspace. And you need people to maintain it all.

Which costs... basically nothing. You could fill all the e-books on Amazon onto a 1TB hard drive, so one rack of servers could handle redundant storage on redundant servers for many times more e-books than Amazon currently sells.

Not only are they expensive, they are also not sold. They are licensed. This removes the ability to use the provisions of the first sale doctrine. So you can buy a license to a book - but you can't transfer it. With a physical book I can sell it to a used book store, hand it to my wife or kids and let them read it, send it off to a friend in another state, donate it, etc. With an e-book I can't (legally) do any of that. I can't even let my wife read it on her e-reader (separate account). Since we are very limited in what we can do (again legally) with them, they don't have the same value to me as a consumer. Yet they charge the same (or higher) price. I had put my thoughts on this into a blog entry some months back. They still pertain now. http://gildude.blogspot.com/2012/03/have-you-bought-into-e-book-model.html [blogspot.com]

One of the things I'd like to see if the ability to transfer from one cloud service to another. Amazon has theirs, Google has theirs, other folks likewise have theirs. But I have no (legal) way to transfer an e-book out of say Amazon's service and into say Google's service if, for instance, I decide I want to use a different e-reader and move "my" licensed content. Can't do it. The only value I get out of e-books that is missing from physical books is the amount of books that can be stored on a small device and the ability to add more to that device from say a hotel room on a trip. However e-books have all the previously mentioned downsides - many of which people are very slowly becoming aware of.

I've noticed more and more Amazon eBooks, especially sci-fi books, being released without DRM. It's still very much in the minority, but at least it's happening.

I posted feedback to their help center a while back telling them that they needed to implement a DRM filter on their advanced search page, at least something like "DRM? Y/N". Yeah, right, I won't be holding my breath for it...

In the meantime, search Amazon for books from Baen or Tor, they're the only two major publishers I am aware of that have implemented a no DRM policy. Or better yet, buy direct from Baen [baenebooks.com]. Tor's supposed to have a store too [tor.com], but something seems to have gone awry there.

In the meantime, search Amazon for books from Baen or Tor, they're the only two major publishers I am aware of that have implemented a no DRM policy. Or better yet, buy direct from Baen [baenebooks.com]. Tor's supposed to have a store too [tor.com], but something seems to have gone awry there.

Actually I don't think baenebooks.com sells books directly anymore. Last time I was there they said that they were now using amazon.com as their ebook distributor.

O'Reilly [oreilly.com] sells their books DRM free in multiple formats. You can re download your books whenever you want and they will even sync your books to your Dropbox account if you so desire. Of course, they sell technical books not story books.

One can easily argue that the price of the e-books shouldn't be dirt cheap because the content is what you're really paying for. What should be true is e-books are the price of the physical book minus all the expenses that physical books have the e-books don't (e.g. paper, printing, shipping, etc) plus a few cents for the server. I don't know what percent that is of a physical book, but that does seem reasonable. I'm disgusted when I see the e-book costing the same or more than a physical book.

I don't think that eBooks really should cost much less than print book. Most of the money goes to the author and publisher. Very little money goes into paying for shipping/warehousing/printing a physical book. You can go down to your local dollar store and pick up novels/bibles there for $1 a piece. And they are probably only buying them off the supplier for 30-50 cents a piece. I wouldn't be surprised if the overhead costs were pretty much the same for print and e-books. I'm actually pretty satisfied w

Most places do not give you the right to sells your ebooks. Many times, you are not even supposed to loan them out. Aside from publishing and distributing cost, this is a reason that a ebooks are much sell valuable than print books and should be sold accordingly.

Sure you can't resell them, but they also never wear out, and they take up a lot less space on your bookshelf, and it can be ordered right from you ebook reader and delivered to you instantly. You don't have to worry about the book store not carrying a new release book because the author isn't popular enough, or worry about them running out of copies. Personally, if I had a choice of an e-book and a paper book for the same price, I would choose the eBook most of the time. It's just more convenient, and w

I don't think that eBooks really should cost much less than print book.

I guess it depends on your definition of "less"
I can get mass market paperbacks from B&N for 10% off the cover price. So I refuse to pay more than 10% off the cover price for an ebook. Yet ebooks are routinely equal to or more than the mass market paperback. Thanks to Apple
The big winners (from me at least) in this fiasco were independent authors. As that is pretty much all I read right now.

I've heard (too lazy to dig out a source) that printing physical books and shipping them to the retailer accounts for about 20% of the retail price. Publishers invest a lot of money in each book that they publish (the author's advance, editing, cover design, marketing and so on). They still have the mindset that shelf space is scarce, meaning that if a book doesn't show a profit within six months or a year of release, it probably never will, because it will have been kicked out of the front of the bookshop

In a sense, "shelf space" is still scarce. If a book does not have a lot of exposure to potential buyers, the likelihood of the book being bought decreases. First/Front page space is scarce. While keeping a title on sale indefinitely is now much cheaper, I would venture a guess that most of the sales are still within the first year.

One can easily argue that the price of the e-books shouldn't be dirt cheap because the content is what you're really paying for.

A hardcover is about $25 for a novel, a paperback is about $8.

Paperbacks are much cheaper for a couple of reasons: 1. the materials; 2. they aren't as "new" so it's like they're on sale compared to the hardback. I don't know if it should be that way, but that's the way it seems to go. I will admit that the hardbacks do last longer, so perhaps the better materials should cost more. Personally, I prefer the paperbacks.

The last book I bought, the DRM-infested e-book was $20 and the paperback was $12.

Either publishers have no clue, or they're trying to keep selling paper books rather than e-books. The funny part is that by demanding DRM on the e-books Amazon sell, they're helping to tie Amazon customers to their Kindles so they can't buy from other stores.

People aren't buying eBooks because they're cheap, they're buying them because you can be pretty much anywhere, and suddenly think "Wait? Stephen King has a new book out? It's been WEEKS since the last one!", whip out your Kindle, select the book, buy it, and start reading it within a minute of having that thought.

And later that day, you can think "Hmmm, what was that fuss about involving King and Kubrick? Oh yeah, I read about that in "The Making of The Shining", let me just take a look at that. And you can witch to that book.

And then you can think "OMG, I don't remember where it was in this tome, but hold on, I have this nifty search button", and then find the relevent pages.

eBooks are 100% about convenience, and 0% about price. It's instant gratification. And while you lose one type of flexibility, you gain other types. And the ability to search or have access to your book without notice may well be more useful to you than the ability to have a copy 20 years from now, or the ability to lend the book to a friend.

If you've ever been to a bookshop you'll have seen books on sale at ridiculously low prices too. It's not unheard of in any industry to put things on "special offer" in order to "sell more stuff".

In addition, this case is about Amazon trying to make its ebooks less expensive than Apple's, B&N's, etc. It is not about Amazon trying to undercut paper book prices, and indeed, as the GGP correctly noted, Amazon frequently charges more for eBooks than new paper books (and virtually always more for eBooks than Amazon charges for used paper copies.)

I'm not sure why you'd think people are buying Kindles to get cheaper books, but it just isn't true, and that's not the attraction.

For you maybe. I like my ebook because it is convenient, and when I bought it, ebooks were cheaper. Then Apple decided to screw the customers over.
I've already payed several hundred dollars for the convenience when I purchased my reader. I don't also need to pay that for each book
don't forgot you also loss the convenience of reselling your book

I buy ebooks when, usually from Amazon, when they are $10 or less. Mostly I don't buy from Apple 1}because I can only read on my iPad and 2) because it is usually more. Increasingly music is the same way, but because there is no lockin it is not so critical. Amazon gets my money for streaming video.

Which is to say I think that I don't think that the price is the critical factor here. Over time we are going to see more open sales and less lockin. This will happen as publishers depend less on printing

Publishers should be able to price their product at whatever levels they want. They got into trouble when they got together to agree on set prices.

Ebooks are an interesting thing. The Apple and Kindle Ebooks seem to be licenses to view the content, unless you illegally break the DRM of the content and load it into callibre or a similar software. You can't buy an ebook and then sell it when you are done. You can't buy a used ebook:)

Physical textbooks are getting that way too, coming with 1 time licenses

See normal pricing is wholesale, meaning that I decide what I need to charge for a product, and I sell it to stores for that much (usually with quantity discounts). Then the retailer is free to price it as they wish. They can mark it up a ton and try to make big unit profits, they can sell it at a loss as a loss leader. I am happy either way because I am getting what I want per copy.

Agency pricing is different. Here the manufacturer tells the retailer what price th

I'm not saying you never see it, the audio world likes it to an extent, Denon does it, but it is not very common. Most manufacturers decide what they want to make per unit and price accordingly. What the retailer does is of no concern to them.

Agency pricing is pretty scummy period in my opinion, and is fairly rare. Here not only was it being done, but as a collusion.

Apple has so far sold 25 billion songs, all with agency pricing. Record companies set the price, and Apple sells it. The same things with books. Apple sells tens of thousands of different ebooks. They don't want to worry about what price to set for each book. So they let the publisher set the price; the publisher has more experience anyway.

Now apparently Apple told the publisher: If you sell the same book to other distributors for less, then we are not interested. Can't see anything wrong with that.

There's a much better way to avoid being gouged for books. Pirate.Ebooks are tiny and there is apparently a quite active ebook piracy scene. You can find torrents that are VAST archives of thousands of books (of just one genre!) and they're smaller than your average HD movie rip.

The ebook prices publishers put forward are an absurd, laughable fantasy designed to protect their old business models as long as possible. (And to foster the idea that their high prices are somehow normal)

It doesn't matter how little it has helped the music industry. What matters is that the music industry has destroyed quite a few lives. And the publishing industry COULD do the same if it chose, I would be wary of putting myself into the middle of a very likely action.

It was about the publishers (and Apple) trying to keep the market more open to competition - an excerpt:

"While the deal caused prices to go up for some new releases and bestsellers, according to Schumer, the average ebook price actually went down from $9 to $7....It was actually Amazon - not Apple or the publishers - that held too much market power and was using

Yep. They're out to make as much money as possible by *DROPPING* the average price by $2.

Reading comprehension for the win!

Maybe you should take a look at who made that $2 claim that you are spouting off as fact. Who made it again? Senator Charles Schumer made that claim in an op-ed to the Wall Street Journal. The SAME Charles Schumer that has taken at LEAST $100k in legal bribes (campaign contributions) from the book industry according to latest figured released [opencongress.org].

Maybe you have a reliable source for that $2 claim that isn't getting kickbacks from the same industry?

Ummm you might want to take a reading compression course – or maybe some high school math. You have been misled or tricked. The article never mentions revenues or profits.

Bestsellers increase in price while other books now sell for less. If Amazon sold the same number of “Bestsellers” as all other books then yes, revenue would decline. However, if “Bestsellers” are their best sellers – which is a reasonable assumption – you can no longer say that. Now, pulling Amazo

Why not? They
Wanted to keep the market open
They wanted to shift power away from distributions (dominated by Amazon)
They wanted to gain control of retail price of their books. (End discounting of their books, have 1 day specials to promote their books, etc)

As for the whole kindle thing. I'm pro a move to open devices and formats, and look forward to Apple relinquishing its patents on its closed formats [and it embracing open ones flac and webm being good starts] , and opening its devices to Alternative store-fronts *including* kindles who currently use a web-app:)

It was about the publishers (and Apple) trying to keep the market more open to competition - an excerpt:

Bless you sweetness, you do know that this is nothing to do with *competition*...its the opposite of competition its a cartel. As for Apple...because you don't really care about the publishers is in it for "most favored nation", that means *nobody* can compete on price with Apple.

In fact this is anticompetitive....its why the DoJ is breathing down Apples Neck

And, oh, my, Senator Schumer of New York says things that support New York-based publishers in a dispute with Washington-based Amazon? Next up, we'll ask congressmen from West Virginia what they think about nuclear power as an alternative to coal; it'll be just as reliable.

There are 3 major players: the publishers, the distributors (Apple or Amazon), and the customers.

Amazon’s Kindle used a distributor’s model. Amazon would buy the book at a fixed price from the publisher but would set the retail price. They could, and did, sell books at a loss, to promote the Kindle.

Apple uses an agency model. The publishers set price and then negotiates the percentage the retailer (Apple) keeps. It is alleged that Apple and the publishers colluded to break Amazon’s near monopoly.

The agency model shifts power away from the distributors to the publishers. As you say this model has been around for a long time – so why care?

What makes it a Federal case is that (allegedly) this raised prices for consumers. Why? Because now all bookstores sell the same book for the same price, so bookstores are no longer competing on price. It shifts power away from customers to the publishers, resulting in higher prices.

But Amazon is selling books at prices across the board that are unprofitable and accusing anyone charging higher prices of gouging. They are actively trying to destroy other distributors and bring publishers under their thumb. This is going to hurt consumers in the long run because destroying publishers and distributors ability to make a profit will result in fewer books getting published. Consumers will have fewer books to choose from and fewer venues in which to shop for them.

There are Slashdotters who value fairness, reject sloppy logic, guilt by association, and broad generalizations.

Was Amazon selling best sellers at a loss as a loss leader? They wanted to generate overall excitement and get people to visit the store and buy Kindles. Or was this to crush book stores – which were already in decline.

If true, and I think there is more than a smidge of truth in those accusations, then Amazon should be brought on a lawsuit for it’s failings. Gi

Nope. Publishers were still setting wholesalse prices in the distributor model. When Amazon set price at $9.99 for a book with a $20 suggested retail price the publisher was making $9.99 on the book. Under agency model they set the prices at $15 and got to keep 2/3s. So they made $9.99 per book. Publishers made more money per book in the distributtor model because with lower prices there were more sales. But driving sales to digital would kill the whole point of having a publisher. Publishers only provide b

No, that would be printers. Publishers commission, give advances, provide editors, provide promotion, provide a brandname, get books reviewed by the important reviewers etc.

They are every bit as important as signing to a label is for a band. You can record your own CD of music and put it up for sale on the web without a record label. But it almost certainly won't see beyond your friends and family. Same goes for ebooks.

So they intentionally raised prices to slow digital down. And they used an agreement that made sure other publishers did the same.

No, if they wanted to slow digital down they'd just not do digital. They like digital, it

But Amazon is selling books at prices across the board that are unprofitable and accusing anyone charging higher prices of gouging. They are actively trying to destroy other distributors and bring publishers under their thumb. This is going to hurt consumers in the long run because destroying publishers and distributors ability to make a profit will result in fewer books getting published. Consumers will have fewer books to choose from and fewer venues in which to shop for them.

I'm absolutely amazed that folks here on Slashdot who claim to value freedom, etc, are actually cheering Amazon's attempt to build a monopoly. Has everyone's hatred for Apple really blinded them that much to what's going on here?

Consumers were hurt when Apple colluded with publishers to raised prices for ebooks. The wrong solution is to form a cartel between Apple and publishers.

In neither the Amazon nor the Apple model is the customer the one with power. Amazon is using its weight to crush competing bookstores. Apple tried to use its weight to stop Amazon, which actually would have eliminated the Amazon price advantage and made it possible for multiple bookstores to run digital versions, because they'd have to compete on things other than trying to match Amazon's negative margin.

The problem was not Apple's app store model. The problem was that Apple allegedly colluded with the publishers to raise the prices of ebooks in other stores. With iPhone and iPad apps, it didn't matter so much, because the Apple store is the only officially-sanctioned source of those. I guess Apple didn't like the thought of having to compete on price with other ebook retailers...

You don't seem to understand. You're right, Apple shouldn't have the ability to set prices for other stores, but what they did was get the publishers to agree that they wouldn't allow other stores (aka: Amazon) to sell for prices less than Apple.

That's why there is such a "to do" about this. It's not the way things normally work and that's why the DOJ has brought the lawsuit about.

You don't seem to understand. You're right, Apple shouldn't have the ability to set prices for other stores, but what they did was get the publishers to agree that they wouldn't allow other stores (aka: Amazon) to sell for prices less than Apple.

Apple's business model was to raise everyone's price and contract so that no one could sell cheaper than them. It was good for apple and good for the publishers, and you want to tell me its "A Good Thing" for consumers? It is outright price fixing.
Amazon's behavior has legal tests you can apply to see if its monopolistic behaviour that's illegal, but you'll find that it involves other distributors (like apple) not being able to get content, which certainly wasn't the case. It isn't illegal to just sell

European Union regulators ended an antitrust probe into ebook prices, accepting an offer by Apple and four publishers to ease pricing restrictions on Amazon and other retailers. The decision hands online retailer Amazon a victory in its attempt to sell ebooks cheaper than rivals in a fast-growing market publishers hope will boost revenue and customer numbers. The European Commission said the concessions from Appl